The Empirical Research About The Effects Of Managerial Overconfidence On Corporate Financial Performance

Overconfidence refers to people overestimate their own judgment and problem solving skills, are a reflection of arbitrariness will quality. Lots of psychological experiments show that people habitually to luck or chance of success to its decisive decision-making ability, ignored the essence of the objective knowledge problem, but will fail to blame their bad luck or is unable to control the objective factors, thus produce the phenomenon of overconfidence.Traditional finance research is based on "rational economic man" hypothesis as a prerequisite,in the research management behavior and decisions from external management mechanism and system arrangement, thus ignore the management of its own behavior characteristics on the degree of influence business decisions. This article will break through the traditional finance theory in the basis of "rational economic man" hypothesis, from management to individual psychological characteristics, based on the perspective of enterprise merger and acquisition, to supplement and perfect the research of enterprise performance, combined with the theoretical analysis and empirical study, to our country enterprise managers overconfidence in psychological and relationship between enterprise performance.When management overconfidence this irrational psychological characteristics, they tend to overestimate the m&a project the benefits and ignore the risk in the project itself, so as to initiate damage the internal value of enterprise merger and acquisition project. And because the overestimate the benefits m&a project, enterprise merger premium, tend to pay too high of an adverse effect on corporate performance after m&a.This paper overconfidence on management theory and principal-agent theory, etc, on the basis of combining the theoretical knowledge selection listed on the Shanghai and shenzhen stock market in 2012-2014 enterprise data for empirical testing. Research results show that the managers overconfidence and m&a behavior was significantly positively related to the overconfidence degree is higher, the company launched the higher the probability of mergers and acquisitions. When compared to the private enterprises, state-owned enterprises management has launched overconfidence psychology will be easier to mergers and acquisitions. Managers overconfidence degree and the enterprise performance has significant negative correlation, managers overconfidence degree is higher, the enterprise performance instead of negative.On specific content arrangement, the full text is divided into five parts.The first part is introduction. First put forward in this paper, the research background and puts forward problems, this paper expatiates the theory significance and practical value, and then describe the basic structure of this article, finally this article possible innovation points are put forward.The second part is literature review. Mainly introduces the related theory, managers overconfidence to define management overconfidence. and interpreting the connotation of overconfidence in existing literature management measures, management overconfidence influence on mergers and acquisitions and management overconfidence influence on enterprise performance. Finally, the literature was reviewed, for this article to find out the new research perspective.The third part is the theoretical analysis and hypothesis is put forward. First put forward the theoretical basis, namely the overconfidence theory, synergy theory and principal-agent theory, and then combined with the management overconfidence and corporate performance, from the Angle of enterprise merger and acquisition are analyzed. Secondly, according to the theoretical analysis and reference to previous research results, this article assumes that are put forward.The fourth part is the empirical test and analysis. This part mainly consists of the following two aspects:the empirical analysis management overconfidence on m&a behavior empirically and overconfidence empirical test of the enterprise performance management. This part mainly includes the selection of sample data, the data source, the management measure of overconfidence, the measure of the merger and acquisition method and measure of enterprise performance. Empirical test is mainly applied to descriptive statistics, correlation analysis, and then through the regression analysis to further study the effect of overconfidence on mergers and acquisitions and management effects on corporate performance after m&a. Finally, the results for robustness analysis.The fifth part is the empirical conclusions and prospects. In this part, combined with the actual situation of our country enterprise’s recommendation, through regular training on management, early detection and correct management overconfidence psychology, ensure enterprise performance; By strengthening the internal and external supervision, establish and improve the corporate governance mechanism and external supervision mechanism, prevent managers overconfidence brings to the enterprise loss. Also pointed out in this paper, the disadvantages of the direction of the further study of the follow-up can make the future.In the study, this paper not only consider the management overconfidence and corporate mergers and acquisitions two relations, and further divided according to corporate Owner form, respectively study management in state-owned enterprises and private enterprises overconfidence influence on merger and acquisition, to the enterprise improve the internal governance mechanism, effective inhibition of management in the enterprises of different Owner forms of irrational behavior to provide beneficial reference to external regulators take concrete and effective supervision measures to provide the reference.